Fixed-wireless operators eye twofold growth
Leony Aurora, The Jakarta Post, Jakarta
Fixed-wireless service operators are upbeat about their prospects and estimate that customer numbers could triple by the end of this year through the aggressive expansion of coverage.
The president and CEO of Fren, a service provided by Mobile-8 Telecom, Hidajat Tjandradjaja, said on Wednesday the company aimed to sign up one million new subscribers this year to join its existing 500,000 customers.
"It's a small number compared to that targeted by Telkomsel, for example," he said, referring to the leading Global System for Mobile Communications (GSM) operator in the country, which hopes to attract six million new users this year.
To reach its target, Fren will expand to Bali in the first semester of 2005 and to Sumatra and Kalimantan in the second semester, Hidajat said on the sidelines of the launch of Bank Mandiri's single access line.
He declined to detail the company's planned capital expenditures for this year.
"One line of fixed-wireless service costs approximately US$85," he said.
Another industry player, Esia, wants to capitalize on its limited license in Jakarta, West Java and Banten by entering 14 new cities this year, starting with Bogor at the end of this month.
"Our target is to attract 500,000 new customers," said deputy president director Bismarka Kurniawan. That figure is double its current number of users.
"The capital expenditure will be more than Rp 1 trillion ($107.70 million), which will come from internal funding," he said.
Fixed-wireless service, which uses Code Division Multiple Access (CDMA) technology, is a phone service with limited cellular mobility in a designated area that was first introduced to Indonesia two years ago.
The service offers rates almost equivalent to the rates of fixed-line service, which is much cheaper than the rates of GSM mobile phone operators.
Fixed wireless began gaining ground in the industry last year, thanks in part to aggressive sales campaigns by operators -- free calls and free short message service during specific hours and days, which moved GSM operators to cut their rates and come up with their own attractive packages.
Operators of the CDMA-based phone service include Telkom's Flexi service, which dominates the market with 1.5 million subscribers, PT Bakrie Telecom with its Esia service, Fren, PT Indosat with StarOne and Mandara Selular Indonesia with Neo_N.
Cellular services, both using CDMA or GSM technology, are seen as answers to the problem of limited communication access in the country.
At present, only about 8.5 million people -- less than 4 percent of the population -- have access to fixed-line phones, while there are about 30 million subscribe to mobile phone services provided by GSM operators.